Prime Minister Ahmed Shafik replaced the head of the Egyptian Financial Supervisory Authority and approved changes to trading rules aimed at limiting possible losses when the market reopens, the North African country’s Cabinet said in a statement today. Egypt’s benchmark EGX 30 Index of stocks slumped 16 percent in the week that ended Jan. 27, the day it last opened.
“They’re trying to limit the drop as much as possible,” said Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment. “Investors were frustrated with the market closure so the resumption is essential. There shouldn’t be a fear of the market taking a hit because those buying at a discount will boost the market in the long term.”
Efsa’s former head, Ziad Bahaa El-Din, is the latest official to be replaced after Shafik brought in 11 new ministers last week to appease protesters. The regulator announced a list of rules on Feb. 19 aimed at managing a possible selloff when trading resumes, including putting in place a 10 percent circuit breaker on the daily price movement of shares, reducing trading hours by one to three, and banning margin trading.
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